UP Government Announces Subsidy of Up to ₹40 Crore for Farm-Stay Projects

In a major push to promote rural tourism and agri-based hospitality, the Uttar Pradesh Tourism Department has announced a new subsidy scheme offering financial assistance of up to ₹40 crore for the development and operation of farm-stay accommodations across the state. This marks the first time the state has launched such a large-scale initiative to attract private investment in farm-stay projects.

 

Tourism Minister Jaiveer Singh invited proposals from investors to set up farm-stay facilities in rural and semi-rural areas, aiming to create unique travel experiences for visitors while generating employment opportunities for local communities. The move is expected to significantly boost the state’s rural economy and support sectors such as agriculture, handicrafts, culture, and eco-tourism.

 

Subsidy Structure Based on Investment Size

The new scheme offers graded subsidies based on the size of investment:

• ₹10 lakh – ₹25 crore: 25% subsidy (up to ₹2 crore)
• ₹25 crore – ₹50 crore: 20% subsidy (up to ₹3 crore)
• ₹50 crore – ₹200 crore: 15% subsidy (up to ₹25 crore)
• ₹200 crore – ₹500 crore: 10% subsidy (up to ₹25 crore)
• Above ₹500 crore: 10% subsidy (up to ₹40 crore)

Priority will be given to proposals submitted by women entrepreneurs, members of Scheduled Castes, Scheduled Tribes, Other Backward Classes, and minorities.

 

Interest Subsidy and Employment Incentives

In addition to capital subsidies, the government will also provide interest subsidies on loans taken for farm-stay projects, making it easier for investors to secure financing. A provision has also been included to support employment generation: employers will receive a monthly assistance of ₹1,500 per employee, encouraging the hiring of local workers in rural tourism operations.

 

Officials stated that the initiative aims to integrate traditional village lifestyles with modern hospitality standards, offering visitors authentic rural experiences such as farming activities, local cuisine, handicraft workshops, and cultural performances.

 

Boost to Rural Economy and Tourism

The scheme is part of Uttar Pradesh’s broader strategy to diversify its tourism offerings and attract both domestic and international travelers. By encouraging private investment and creating new tourism infrastructure, the government hopes to transform rural regions into vibrant tourism destinations while enhancing income opportunities for farmers and artisans.

 

Experts believe the initiative could create thousands of jobs, support small-scale industries, and contribute to the state’s GDP by tapping into the growing demand for sustainable and experiential tourism.